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buying home insurance

Every year you should review your Home Insurance as we live in uncertain environmental times and no-one is immune from the potential for damage.

With climate change threatening to bring wetter winters and higher sea levels to the UK, the Environment Agency estimates that 1.9 million properties could be at risk from flooding. The usual summer heat waves may also now have an adverse effect on some homes, as extended periods of dry weather can also dry out clay soils, causing subsidence.

This all means it is essential to ensure that your home insurance cover is able to protect your home against whatever the elements have in store for us throughout the year.

A lot of us change our credit card and energy suppliers as often as our socks, but we are much less likely to switch our home insurance. Data provided by Mintel suggests that half of all policyholders have been with their current home insurance provider for over five years.

You could save hundreds of pounds by switching your home insurance, and searching the market.

So what should you look for when buying home insurance?

The first decision is whether to buy both buildings and home contents insurance from the same provider. A lot of household disasters will require you to claim on both insurance plans, so having to only deal with one insurance company will greatly simplify the claims process.

It is also generally cheaper to purchase both insurance plans from the same provider. Such companies as eSure offer a 35% discount when you buy buildings and contents together online.

In research it was found that a quote from Privilege for both buildings and contents insurance together saved £140, compared with separate quotes for each type.

But you need to remember the cheapest is not always the best. You need to make sure the policy provides you with all the cover you need.

The cost of your insurance is based on several factors. The main one is your postcode, which can be used to determine if you live in a high crime area, or if your district is prone to subsidence or built on a flood plain.

For buildings insurance the age of your property matters, as the building materials for an older house will be more difficult and expensive to obtain, while some regions also have higher building costs.

Insurers tend to offer one of two different types of policy, blanket cover or sum assured.

Sum assured, offered by insurers such as Lloyds TSB Home Insurance, will insure your buildings and contents for a specific figure of your choice. Blanket cover will automatically cover you for any claim up to a pre-named sum chosen by the insurer.

Churchill Home Insurance for example will cover your buildings for £250,000 and contents for £40,000 as standard. However the amount chosen by the insurer can vary a lot with several offering £1 million insurance cover as standard on buildings insurance and some including Halifax and Nationwide – offering unlimited amount of building cover.

Blanket cover is usually based on the number of bedrooms you have, and you don’t have to workout the specific values of your home and its contents, with sum insured you decide what your home and contents are worth. One note of warning with this is that insurers may only pay out a proportional amount or refuse to pay at all if you try to claim above the amount you have been insured for.

Whatever type of cover you choose it’s important that it’s index-linked to inflation, to reflect increases in prices.

Rebuild Costs

Make sure that your buildings policy covers you for the true rebuilding cost of your house and any outbuildings such as garages. The rebuilding cost of your house is not its market or council tax valuation but is based on how much it would cost in materials and labour to completely restore the home if it was destroyed. If you have bought your house recently the rebuilding figure would have been included in a structural survey, or for an accurate figure you could pay a surveyor to calculate the cost for you.

If you are renewing your cover, bear in mind that if you have had major home improvements like a conservatory or an extension, your rebuild costs will be higher. As well as rebuild costs, buildings insurance will generally cover you for damage to your home, shed, garage or greenhouse by explosion, fire, flood, subsidence, lightning or falling tree.

You’ll be covered for your legal liability to others, if a problem, with your house causes any harm to them, and you can also claim if you damage certain internal fixtures and fittings such as baths and sinks.

Some policies will also cover you for accidental damage to underground pipes and cables, but other accidental damage won’t usually be covered without an additional premium.

It can be difficult to get insurance for properties that have previously experienced subsidence or flooding. For houses with no previous subsidence, companies will generally charge an excess of £1,000 for any subsidence claim, but this can increase if a claim has been previously made.

Also remember that subsistence, flood or fire may make your home uninhabitable for several months, so check that your policy covers the cost of alternative accommodation.

Related Sites of Interest

Direct Line
Churchill Home Insurance